Posted by & filed under digital divide, Digital Policy, industry analysis, M-commerce, telecomunications, WI-Fi.

Description: The Harper government is stepping into a contentious debate over just how much Canadians should pay for Internet service, as Industry Minister Tony Clement says he will review a federal regulator’s decision that will raise prices for consumers and businesses

Source: Globe &

Date: Feb 1, 2011

As people access increasing numbers of documents, video, software and other large files through the Internet, major communications providers such as Shaw Communications Inc. and BCE Inc.’s Bell Canada unit have begun to regulate how much their customers can download – charging them extra when they exceed monthly limits. Many consumers have responded by turning to smaller Internet providers that lease space on networks such as Bell’s and offer popular “unlimited” plans without such caps.  Read rest of story

Questions for discussion:

  • If you were an ISP provider, what arguments would you make that Canada’s rates should be higher than the rest of North America and the world?
  • As a small business what arguments would you make that Canada finds itself at a competitive disadvantage as a result of these high, almost monopolistics rates that we as Canadians pay?

9 Responses to “Ottawa enters dispute over higher Internet fees”

  1. Russ

    This is an interesting situation that is being discussed in the telecom industry in Canada. For the smaller businesses who have recently launched online customer service video chatting services to add value to their business in the global marketplace they have a valid complaint to the CRTC for trying to put boundaries on their gigabit usage. If the rumors that are going around go through, many businesses will be at a visible disadvantage when compared to other companies who are pursing similar business practices in other parts of the world that do not have such restrictive usage laws. In my opinion data usage should be on a flat rate billing plan. Can you imagine if you were billed for the hours of TV you watched? I guess it would probably cause more people to get away from the TV because they could not afford to watch it as much as they would like to, or as much as they already do. As a consumer I think there should be laws on how much telecom companies can charge consumers without putting limits on usage. It seems to be getting out of hand and ridiculously priced. The only justification that ISP’s have for charging more in Canada than in other parts of the world is the number of customers. Because Canada’s population is a lot smaller than the United States they are not making their profits off of the volume of the services being rendered but rather the high prices they charge for each individual plan is helping them to get the amount they are aiming for.

  2. Clayton Varjassy

    There are a few major problems and setbacks with providing internet caps, but there are definitely two sides to the argument.

    From the ISP’s perspective, Canada is a large country that is less densely populated than the United States. This means that it is going to cost them more per person to provide internet to the majority of the population. That being said, once those initial development costs are realized, and it becomes about simply providing bandwidth, it’s tough to argue a cost of $2.50+ per GB when their costs to provide that gigabyte are only a penny or two. Also, having to pay a premium like that would not only kill business models like Netflix streaming, but it could have a strong negative impact on small businesses that rely heavily on teleconferencing software such as GoToMeeting or Skype. If the cost to actually use these services goes beyond its benefit, businesses in Canada may have to find a knew way of doing things.

  3. Derek Wilson

    I have a hard time believing that Canada’s rates should be higher, as I read in another article that the federal government helps pay for infrastructure. This seems like a huge money grab for the big companies as it is absurd for them to charge users $2.50 for every additional gigabyte of information. Everything is being streamed over the internet and we are becoming more reliant on the technology to conduct business better and faster and they want to throw a cap on that and make a few million in the process! This will only continue to hurt businesses, especially small businesses who can’t afford these overages, and this will create a huge disadvantage for Canada on a whole in the business world. If this follows through (I really hope it won’t)the rest of the world will have a competitive advantage over us because they will be able to more readily and freely access the internet and use it for e-commerce.

  4. Todd McCune

    From the perspective of an ISP provider, you can say that Canada should be charged more for internet services than the rest of the world because of a few factors including our high percentage of internet usage, high average household income, and our large population spread over a large country. The giants such as Telus, Bell, and Shaw serve so many people that their costs are probably rising. As a small business, I would argue that it would be ridiculous for these charges to go through. More and more businesses are turning to online services to expand their customer base and make it easier for customers to access their business. By increasing internet charges, business will be less likely to use e-commerce because of the expenses which will lead to less innovation from business in Canada. As Canada is already behind the world leaders in innovation, this would not be a smart move by to regualate these charges because it could see us falling even farther behind the rest of the world as far as innovation. We should be encouraging our people to use the internet and its services because business is moving in a direction that will see more and more services available online.

  5. Brenda Bicharr

    As the world moves from the era of no technology to everything going E-commerce and online; the last thing people need is a drawback. If every time people start using more of technology there is an increase in the price of using it then there would come a time when the growth in the use of technology will no longer be in progress or would be held back. Eventually Canada will find itself behind its major country competitors. It’s a trend which is taking over the whole world and if putting a cost on it will make Canadian internet companies a few thousand dollars. This amount will be nothing compared to the millions of dollars the company as a whole could lose by being technologically behind even by a mile. All the same it should not be forgotten that government intervention fully would eventually affect the future use of technology in Canada. There is a saying in my country, don’t invite government in if you won’t like them to stay.

  6. Ashleigh

    Canada’s Internet rates should not higher than any others in North America. It does not cost them barely anything for a gigabyte, yet they are charging $2.50 for every extra one when it comes to downloading from the internet. You should be able to download from the Internet, as long as it is legal, for no charge. Putting a cap on the amount is reasonable but charging for every gigabyte over seems a little over the top. Small businesses in Canada would have a competitive disadvantage because if they are spending more money on services for the Internet, they could have used that money somewhere else more beneficial to them. Also, they could be missing out on telecommunications such as Skype to be able to make business deals. This could have a negative impact on their business since they will not have the technology to be able to keep up with every one else.

  7. Jenn Oloya

    I don’t know what valid argument an ISP provider can make to justify Canada’s rate being higher than the rest of North America and the world. I guess that they can say that Canada is one of the highest users of Internet and downloads compared to the rest of the world. There is clearly a disadvantage for Canada when having high rates, these disadvantage could be from small business not being able to grow or goes under because they could not afford to keep up with the rates set by the large internet companies. There are so many business that are ran over the internet and a lot of business or individuals use the internet as a means to bring income, if these rates are high the business who run over the internet and the individual who use internet services such as EBay for income would suffer.

  8. Ifeoma Moseri

    Another decision that re-affirms my belief that the business model in Canada (especially big corporations) is not at all based on working harder to provide better services to their customers while striving to be more competitive. Most big corporation rely on a market position where they enjoy a monopoly, duopoly or at most oligopoly over key sectors of the economy in Canada.
    Having such a position while enjoying protectionist policies from the government of Canada against any new players only encourages these businesses to gouge prices and provide even worse customer service (Emirates vs Air Canada rings a bell here!).

    That’s why the vast majority of Canadian businesses can’t stand a chance to compete in international markets and will never be able to if they keep doing what they do best lobby the government and gouge Canadians (for those of you who would like to brag about RIM, well, they are losing their market edge and no longer belong to the big 5!). Just look at how much Europeans are paying for their money vs. what Canadians are paying…it’s absurd to just see how big the difference is.

    This ruling proves to me that CRTC no longer serves their purpose and they should be replaced by a neutral body that keeps the big picture in mind…

  9. Nicole Hendry

    The only reasons I can think of for an ISP provider to increase costs is due to the population size in Canada. We are much smaller in Canada then the US and I can see why they would want to change regulations. Though after hearing that it only costs them a penny for a gigabyte and they are charging $2.50 for every extra one I’m starting to think this is just another way to rip us off. I feel that just as all these new technologies are coming out to help small businesses out such as skype and other forms of video conferencing that it would be silly to charge them so much that cost would outweigh the benefit. I think this should cause concern for everyone not only just small businesses. So many of our day to day tasks we have become reliant on the internet and it would make life a whole lot harder to have to re-learn how things use to be done in past generations. I definitely believe that these new regulations are going to hurt Canada’s economy.

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